Riyadh Cement CEO expects cement demand to improve in H2 2024

Shoeil Al Ayed, CEO of Riyadh Cement Co.

Cement demand is expected to improve in Q3 and Q4 2024 despite a slight year-on-year (YoY) decline of 1% in H1 2024 due to a slowdown in the residential sector, Shoeil Al Ayed, CEO, Riyadh Cement Co., told Argaam.

The company’s strong Q2 2024 earnings were spurred by a 6% increase in total revenue on higher selling prices and a rise in financing income from investments in short-term deposits by SAR 1 million, or 251% YoY.

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Demand for black cement increased by 3% YoY in the second quarter of 2024, said Al Ayed, noting that the company’s black and white cement inventory is at 1.06 million tons and 315,000 tons, respectively.

The average selling price for black cement in the first quarter of 2024 reached SAR 190 per ton in the Central region.

Speaking on the increase in selling prices despite declining sales volumes, Al Ayed explained that rising fuel prices led to higher production costs, compelling the company to raise its selling prices.

The overall demand weakened across the Kingdom, except in the Central region, which saw demand growth of more than 5% thanks to major projects under implementation compared to the same period in 2023.

According to data available with Argaam, Riyadh Cement reported a 6% profit increase in H1 2024 to SAR 134.5 million, from SAR 126.7 million a year ago. The Q2 2024 earnings stood at SAR 64.4 million.